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Revisiting the 2015 Predictions

It’s easy to make predictions. It’s even easier to cherry pick correct predictions and hope the rest are forgotten. Believers as we are in accountability, however, for the fifth year in a row it’s time to review my predictions for the calendar year just ended. All of them, good, bad and ugly.

As is the case every year, this is a two part exercise. First, reviewing and grading the predictions from the prior year, and second, the predictions for this one. The results articulated by the first hopefully allow the reader to properly weight the contents of the second – with one important caveat that I’ll get to.

This year will be the sixth year I have set down annual predictions. For the curious, here is how I have fared in years past.

Before we get to the review of 2015’s forecast, one important note regarding the caveat mentioned above. Prior to 2013, the predictions in this space focused on relatively straightforward expectations with well understood variables. After some serious shade thrown by constructive feedback from Bryan Cantrill, however, emphasis shifted towards trying to better anticipate the totally unexpected than the reverse.

With the benefit of hindsight, one thing is apparent:

Nevertheless, we press on. Without further delay, here are the 2015 predictions in review.


  • Amazon is Going to Become More Dominant Thanks to “Honeypots”
    In 2015, Amazon will become even more dominant thanks to its ability to land customers on what I term “honeypot” services – services that are exceedingly easy to consume, and thus attractive – and cross/upsell them to more difficult-to-replicate or proprietary AWS products. Which are, notably, higher margin. Examples of so-called “honeypot” services are basic compute (EC2) and storage (S3) services. As consumption of these services increases, which it is across a large number of customers and wide range of industries, the friction towards other AWS services such as Kinesis, Redshift and so on decreases and consumption goes up. Much as was the case with Microsoft’s Windows platform, the inertia to leave AWS will become excessive.

According to several metrics, AWS satisfied the prediction that it would extend its lead in 2015. This, in spite of notable increases in traction for several other players, most notably Google and Microsoft. Attributing the cause to this performance is a more difficult question, but it is interesting to note that AWS has a new title holder for the fastest growing service in its history, Aurora, which took the crown from Redshift. The rapid adoption of unique-to-AWS, and thus not externally replicable, services is suggestive of a user population that is willing to invest in premium, in-place services. As quickly as these services are growing, however, it is unrealistic to believe that they are the engines behind AWS’ broader acceleration: they’re simply too new. Which in turn implies that the growth of AWS is still fueled in large part by its core, basic offerings and that services such as Aurora or Redshift are important first for their ability to lock customers in and secondarily for the revenue they generate.

And so we’ll count this prediction as a hit.

  • Kubernetes, Mesos, Spark et al are the New NoSQL
    Not functionally, of course. But the chaos of the early NoSQL market is remarkably similar to the evolution of what we’re seeing from projects like Mesos or Spark. First, there has been a rapid introduction of a variety of products which require a new conceptual understanding of infrastructure to appreciate. Second, while there may be areas of overlap between projects, in general they are quite distinct from one another. Third, the market’s understanding of what these projects are for and how they are to be used is poor to quite poor.

    This is currently what we see when customers are evaluating projects like Kubernetes, Mesos and Spark: the initial investigation is less functional capability or performance than basic education. Not through any failing on the part of the individual projects, of course. It just takes time for markets to catch up. For 2015, then, expect these and similar projects to achieve higher levels of visibility, but remain poorly understood outside the technical elite.

Developer and end user questions about emerging infrastructure projects are nearly ubiquitous. So are vendor efforts to answer these questions. Nor is this just Kubernetes.

Ten years ago, the most difficult software choices an enterprise had to make were a) which relational database and b) which application server to use. Today, they are confronted by a bewildering array not just of projects and products, but of distinct technical approaches and visions. Worse, these are moving targets; two projects that do not functionally overlap today may – probably will – tomorrow.

Until these coalesce around standard, accepted models much as Ajax once came to describe a mixed bag of unrelated technologies which were employed towards a particular approach, market confusion will remain and education will be a significant upfront problem for infrastructure projects major and minor.

We’ll call this a hit.


  • Docker will See Minimal Impact from Rocket
    Following the announcement of CoreOS’s container runtime project, Rocket, we began to field a lot of questions about what this meant for Docker. Initially, of course, the answer was simply that it was too soon to say. As we’ve said many times, Docker is one of the fastest growing – in the visibility sense – projects we have ever seen. Along with Node.js and a few others, it piqued developer interest in a way and at a rate that is exceedingly rare. But past popularity, while strongly correlated with future popularity, is not a guarantee.

    In the time since, we’ve had a lot of conversations about Docker and Rocket, and the anecdotal evidence strongly suggested that the negative impact, if any, to Docker’s trajectory would be medium to long term. Most of the conversations we have had with people in and around the Docker ecosystem suggest that while they share some of CoreOS’s concerns (and have some not commonly cited), the project’s momentum was such that they were committed for the foreseeable future.

    It’s still early, and the results are incomplete, but the quantitative data from my colleague above seems to support this conclusion. At least as measured by project activity, Docker’s trendline looks unimpacted by the announcement of Rocket. I expect this to continue in 2015. Note that this doesn’t mean that Rocket is without prospects: multiple third parties have told us they are open to the idea of supporting alternative container architectures. But in 2015, at least, Docker’s ascent should continue, if not necessarily at the same exponential rate.

Normally, this is where we’d examine quantitative data from sources like GitHub, Stack Overflow and so on to assess Docker’s trajectory and potential impacts on it. This is unnecessary, however. It would be difficult to build the argument that Docker was not impacted by Rocket in the wake of the June announcement of the Open Container Initiative. To be clear, this is a low level standard, one that permits competing container implementations: it is explicitly not an effort to make either Docker or Rocket the once and future container spec. And Docker’s momentum as a project has continued unabated.

But as welcome as the news was from a market perspective – standard wars are tedious and benefit few over the long term – the impact of Rocket and the drivers behind it are clear. Which makes this, unfortunately, a miss.

  • Google Will Hedge its Bets with Java and Android, But Not Play the Swift Card
    That being said, change is unlikely to be coming in 2015 if it arrives at all. For one, Go is a runtime largely focused on infrastructure for the time being. For another, Google has no real impetus to change at the moment. Undoubtedly the company is hedging its bets internally pending the outcome of “Oracle America, Inc. v. Google, Inc.,” which has seen the Supreme Court ask for the federal government’s opinions. And certainly the meteoric growth of Swift has to be comforting should the company need to make a clean break with Java.

    But the bet here is, SCOTUS or no, we won’t see a major change on the Android platform in 2015.

Scoring this prediction depends on whether the spirit of “major change” is accounted for. If we judge this prediction literally, it’s a miss because the platform did in fact see a major change in 2015. For the first time since the project’s inception, Android is moving to something other than a cleanroom reimplementation of the runtime. For reasons likely stemming from Oracle America, Inc. v. Google, Inc., Google is moving Android N to the OpenJDK project. Which is the literal definition of a major change.

If the context of the prediction is taken into account, however, the prediction is less of a miss. While the shift to OpenJDK is a big change for the Android project, it is still Java. What Google has declined to do, at least this time around, is make a change such as the one Apple is undertaking, replacing Objective C with the newly released (and open sourced) Swift.

In light of that fact, it seems fair to call this a push.

  • Services Will Be the New Open Core
    Which is why we are and will continue to see companies turn to service-based revenue models as an alternative. When you’re selling a service instead of merely a product, many of the questions endemic to open core go away. And even in models where 100% of the source code is made available, selling services remains a simpler exercise because selling services is not just selling source code: it’s selling the ability to run, manage and maintain that code.

If services were the new open core, what would we expect to see? One logical outcome would be commercial organizations – especially those who have historically embraced open core-like revenue models – deploying open source software as a service. Which is what we began to see in 2015. Previously, we’ve seen Oracle expand not just its business models but its financial reporting from the traditional on premise software offerings to incorporate IaaS, PaaS and SaaS. In 2015, this continued. In March, Elastic – originally known as Elasticsearch – acquired a company called Found, whose principal product was Elasticsearch offered as a service. Asked about the deal, Elastic CEO Steven Schuurman responded:

“At this point we have massive corporations who run 10, 20, 30, or many more instances of ELK servicing different use cases and they’re coming to us asking how to manage and provision different deployments. On the other hand, people ask us when we’re going to provide something as a service.”

IBM came to a similar conclusion regarding the demand for these types of database-as-a-service offerings, adding a company called Compose in July. Like Found, Compose was in the database-as-a-service business, and was added to IBM’s existing stable of software as a service offerings.

Less obviously, a large number of the commercial open source organizations we spoke with over the year were either exploring the idea of similar forays into SaaS models or actively engaged in their execution.

None of which, of course, should come as a surprise given the aforementioned traction of products like Aurora. Service-based models are increasingly in demand, as Schuurman said, which means that vendors will supply that demand.

This is a hit.


  • One Consumer IoT Provider is going to be Penetrated with Far Reaching Consequences
    If it weren’t for the fact that there’s only ten months remaining in the year and the “far reaching” qualifier, this would be better categorized as “Likely” or even “Safe.” But really, this prediction is less about timing and more about inevitability. Given the near daily breaches of organizations regarded as technically capable, the longer the time horizon the closer the probability of a major IoT intrusion gets to 1. The attack surface of the consumer IoT market is expanding dramatically from thermostats to smoke detectors to alarms to light switches to door locks to security systems. Eventually one of these providers is going to be successfully attacked, and bad things will follow. The prediction here is that that happens this year, much as I hope otherwise.

The problem with this prediction, again, is its specificity. In a year in which attackers found vulnerabilities in everything from from Barbie dolls to Jeeps, the fragility of the IoT ecosystem was revealed repeatedly. But while there were attacks on consumer IoT providers such as FitBit, none of them came with far reaching consequences. That we know of now, at least.

As much as this prediction is essentially inevitable, then, for the year 2015 it’s a miss. Thankfully.

  • AWS Lambda Will be Cloned by Competitive Providers
    For my money, however, Lambda was the most interesting service introduced by AWS last year. On the surface, it seems simplistic: little more than Node daemons, in fact. But as the industry moves towards services in general and microservices specifically, Lambda offers key advantages over competing models and will begin to push developer expectations. First, there’s no VM or instance overhead: Node snippets are hosted effectively in stasis, waiting on a particular trigger. Just as interest in lighter weight instances is driving containers, so too does it serve as incentive for Lambda adoption. Second, pricing is based on requests served – not running time. While the on-demand nature of the public cloud offered a truly pay-per-use model relative to traditional server deployments, Lambda pushes this model even further by redefining usage from merely running to actually executing. Third, Lambda not only enables but compels a services-based approach by lowering the friction and increasing the incentives towards the servicification of architectures.

    Which is why I expect Lambda to be heavily influential if not cloned outright, and quickly.

This was, simply put, a miss, and a miss with interesting implications. Lambda’s server-less model was and is an interesting, innovative new approach for constructing certain types of applications. And it certainly attracted its a reasonable share of developer attention; the Serverless framework (AKA JAWS) checks in with over 6600 stars on GitHub – or about a third of what Node has – at present.

For all of that, however, Lambda adoption has not been proportionate to its level of market differentiation. For such an interesting new service, actual usage of Lambda has been surprisingly modest. On Stack Overflow, the aws-lambda tag has a mere 388 questions attached to it – Node has almost 110,000.

The question is why, and my colleague actually answered this in October:

So far Lambda adoption has been a little slow, partly because it doesn’t fit into established dev pipelines and toolchains, but also almost certainly because of fears over lock-in.

Lambda, in other words, has the same problem that and Google App Engine had when they launched: however impressive the service, developers are reluctant to walk into a room that they can’t walk out of. Which in turn implies that, counterintuitively, the best thing for Lambda at this point would be a competitive clone. AWS could potentially address this concern and jumpstart Lambda adoption by releasing an open source implementation of the service, even a functionally limited version, but given the company’s history this is extremely unlikely.

In the interim, then, AWS must either find ways to reduce the potential for lock-in or wait for other competitors to make its own product easier to adopt.


  • Slack’s Next Valuation Will be Closer to WhatsApp than $1B
    In late October of last year, Slack took $120M in new financing that valued the company at $1.12B. A few eyebrows were raised at that number: as Business Insider put it: “when it was given a $1.1 billion valuation last October, just 8 months after launching for the general public, there were some question marks surrounding its real value.”

    The prediction here, however, is that that number is going to seem hilariously light. The basic numbers are good. The company is adding $1M in ARR every 11 days, and has grown its user base by 33X in the past twelve months. Those users have sent 1.7B messages in that span.

    Anecdotal examples do not a valuation make, of course. And there’s no guarantee that Slack will do anything to advance this usage, or even continue to permit it. But it does speak to the company’s intrinsic ability to function well as a message platform outside of the target quote unquote business team model. What might a company with the ability to sell to both WhatsApp users and enterprises both be worth? My prediction for 2015 is a lot more than $1.12B.

Yet another prediction undone by an overly specific forecast. On the one hand, Slack’s valuation is enormously higher than it was entering the year. By March, in fact, a mere five months after the billion dollar round that mystified some observers, Slack’s valuation more than doubled to just under $3 billion. Having made the leap from application to platform in December, with a variety of third parties now treating it as a viable route to market, the company is unquestionably more valuable on paper than it was during its last round, even if the current funding climate has soured.

All of which validates the underlying premise to the original prediction, which was that the company was “hilariously” undervalued. The problem was the usage of WhatsApp as the yardstick. Even with its valuation more than doubled, Slack is still not within hailing distance of the $19B WhatsApp fetched.

I remain convinced that the company’s strict business focus and blind eye towards off label usage of the service is doing it no favors from a valuation standpoint, but as the saying goes, it is what it is.

Which means that this prediction is, sadly, a miss.


  • The Apple Watch Will be the New Newton

    It could very well be that Apple will find a real hook with the Watch and sell them hand over fist, but I’m predicting modest uptake – for Apple, anyway – in 2015. They’ll be popular in niches. The Apple faithful will find uses for it and ways to excuse the expected shortcomings of a first edition model. If John Gruber’s speculation on pricing is correct, meanwhile, Apple will sell a number of the gold plated Edition model to overly status conscious rich elites. But if recent rumors about battery life are even close to correct, I find it difficult to believe that the average iPhone user will be willing to charge his iPhone once a day and her watch twice in that span.

    While betting against Apple has been a fool’s game for the better part of a decade, then, call me the fool. I’m betting the under on the Apple Watch. Smartwatches will get here eventually, I’m sure, but I don’t think the technology is quite here yet. Much as it wasn’t with the Newton once upon a time.

Out of all of the predictions, this is the most difficult to grade because with the exception of Apple itself, no one actually knows how well or poorly the Apple watch is selling. Speculation, however, is not in short supply.

Fred Wilson predicted in 2015 that the Watch would not be a home run, and got irritated when media outlets interpreted that to mean it would be a flop. John Gruber was understanding of the nuance. In December, he scored his prediction that it would be a flop as a hit (as an aside, Gruber was less impressed with his predictions for 2016). An analyst with Creative Strategies regarded it as “absolutely mind blowing that people in their right mind think the Apple Watch is a flop.”

Who’s right? In July, in a piece entitled “Why the Apple Watch is Flopping,” Engadget said:

Imagine if months after the iPad release, we learned it still hadn’t outsold some model of Windows tablet. A couple of million units sold sounds okay, but hardly the sort of smash hit we’ve come to expect from Apple. A precipitous decline in sales after just a couple of months? Not a good sign.

In November, Forbes opened a piece on the Watch with the following:

Apple is remaining tight lipped about the official sales figures for its debut wearable – the Apple Watch – but that hasn’t stopped analyst Canalys declaring some pretty staggering numbers.

It has stated that Apple has “shipped nearly 7 million smart watches since launch, a figure in excess of all other vendors’ combined shipments over the previous five quarters.”

And just last month, Wired closed a piece of theirs on the Watch with:

Cook has said in the past that the company keeps quiet on specific sales numbers for the Watch for competitive reasons, even when they exceed expectations. Still, one can’t help but think that if Apple had such a record-breaking December—which would make sense, since Apple likely sold a whole bunch of Watches over the holidays—it would want the world to know.

The tl;dr then is that no one knows if the Watch is a success because Apple declines to provide the information necessary to make a firm judgement. Two assertions seems plausible, however. First, that Apple is outselling other comparable wearables; whatever the market for the Apple Watch, it seems clear that Apple’s logistical, marketing and product design advantages make comparisons to Android, Pebble and other smartwatches pointless. But as Wired suggests, if the Apple Watch was a breakout success, it is unlikely that they’d continue to be opaque about the sales figures. If you have success, particularly in a brand new product category with uncertain prospects, you would typically advertise that fact.

Anecdotally, reactions from Apple Watch buyers suggest that the Watch is a very different product from the iPhone. When the iPhone was released, every buyer was an evangelist. Having the internet in your pocket – the real internet rather than a tiny subset dumbed down via WAP – was life changing. Watch users are, in my experience, much less enthusiastic. Most like it, for the notifications or the fitness capabilities, typically, but I have yet to have a conversation with a Watch buyer who characterizes it as a must buy, let alone a life changing device. The most common review is something like “I like it, but it’s not for everyone.” The iPhone, comparatively, was for everyone.

There are very few products like the iPhone, of course, so judging a product – even an Apple product – by that standard is, to some degree, unfair. But with Apple flush with cash but facing questions about its ability to grow, all eyes were on the company to see if it could reinvent the watch the way it did the mobile phone. So far, at least, the answer appears to be no. Arguably part of the problem is a function of technology limitations – weight, battery life and so on. But the Watch is also still waiting for its killer app, its internet-in-your-pocket, and it may be that there simply isn’t one.

Time will tell on that subject, and unfortunately it will have to for this predication as well. Absent better data, the verdict on this prediction is incomplete.

The Final Tally

How did I do? Setting aside the one push and the one incomplete grade, three of six predictions can be argued to be correct. This marks the second year in a row of fifty percent success. Another way of saying this is that I tied the lowest rate since I started doing these predictions.

As was the case last year, the failure rate of predictions is highly correlated to their difficulty. It’s simpler, obviously, to predict some things than others, hence the categories.

For 2016, the predictions will nevertheless attempt to preserve the aggression. Which means that I can probably look forward to a similar failure rate this time next year.

Categories: Cloud, Collaboration, Containers, IoT, Services.

The Time is Nigh

As many of you are already aware, Kate and I are expecting a baby. With a scheduled delivery date of next Monday, today is my last day in the office. As of the close of business, I will be headed out on paternity leave. My return date will depend on how things proceed with mother and baby, but I’m hoping to ramp back up at some point in mid to late January.

For RedMonk customers, not much changes: contact Juliane for any of your engagement needs and Marcia for anything operations related. James, at least, will be around to keep the lights on.

While I’m out of the office, I will be around as usual on Twitter – and I hear parents of newborns have plenty of free time. Until my return then, be well, enjoy your holidays and wish us luck.

Categories: Personal.

DVCS and Git Usage in 2015

For many in the industry today, version control and decentralized version control are assumed to be synonomous. Slides covering the DevOps lifecycle, as but one example, may or may not call out Git specifically in the version control portion of the stack depiction, but when the slides are actually presented, that is in the overwhelming majority of cases what is meant. Git, to some degree, is treated as a de facto standard. Cloud platforms leverage Git as a deployment mechanism, and new collaboration tools built on services built on Git continue to emerge.

Are these assumptions well founded, however? Is Git the version control monster that it appears to be? To assess this, we check Open Hub’s (formerly Ohloh) dataset every year around this time to assess, at least amongst its sampled projects, the relative traction for the various version control systems. Built to index public repositories, it gives us insight into the respective usage at least within its broad dataset. In 2010 when we first examined its data, Open Hub was crawling some 238,000 projects, and Git managed just 11% of them. For this year’s snapshot, that number has swelled to over 683,000 – or close to 3X as many. And Git’s playing a much more significant role today than it did then.

Before we get into the findings, more details on the source and issues.


The data in this chart was taken from snapshots of the Open Hub data exposed here.

Objections & Responses

  • Open Hub data cannot be considered representative of the wider distribution of version control systems“: This is true, and no claims are made here otherwise. While it necessarily omits enterprise adoption, however, it is believed here that Open Hub’s dataset is more likely to be predictive moving forward than a wider sample.
  • Many of the projects Open Hub surveys are dormant“: This is very likely true. But the size of the sample makes it interesting even if potentially limited in specific ways.
  • Open Hub’s sampling has evolved over the years, and now includes repositories and forges it did not previously“: Also true. It also, by definition, includes new projects over time. When we first examined the data, Open Hub surveyed less than 300,000 projects. Today it’s over 600,000. This is a natural evolution of the survey population, one that’s inclusive of evolving developer behaviors.

With those out of the way, let’s look at a few charts.

(click to embiggen)

If we group the various different version control systems by category – centralized or decentralized – this is the percent of share. Note that 2011 is an assumption because we don’t have hard data for that year, but even over the last four years a trend is apparent. Decentralized tooling has moved from less than one in three projects in 2012 (32%) to closer to one in two in 2015 (43%). That’s the good news for DVCS advocates. The bad news is that this rate has become stagnant in recent years. It was 43% in 2013, actually dipped slightly to 42% in 2014, and returned to 43%, as mentioned, this year.

On the one hand, this suggests that DVCS generally and Git specifically might have plateaued. But the more likely explanation is that this is an artifact of the Open Hub dataset, and our imperfect view of same. It is logical to assume that some portion – possibly a very large one – of the Open Hub surveyed projects are abandoned, and therefore not an accurate reflection of current usage. Many of those, purely as a function of their age, are likely to be centralized projects.

Nor did the Open Hub dataset add many projects in the past calendar year; by our count, it’s around 9671 total net new projects surveyed, or around 1% of the total. Which means that even if every new project indexed was housed in a Git repository, the overall needle wouldn’t move much.

Overall, however, if we compare the change in individual share of Open Hub projects from 2010 against 2015, these are the respective losses and gains.

(click to embiggen)

Git unsurprisingly is the big winner, CVS the equally unsurprising loser. Nor has any of the data collected suggested material gains for non-Git platforms. DVCS in general has gained considerably, and is now close to parity and Git is overwhelmingly the most popular choice in that segment.

What the specific rate of current adoption is versus the larger body of total projects will require another dataset, or more detailed access to this one. For those who may be curious, we did compare this year’s numbers against last years, but as the largest single change was Git’s gain of 0.75% share it didn’t offer much in the way of new information. Given that existing projects may change their repository, we can’t simply assume that Git captured 75% of the net new projects.

Our annual look at the Open Hub dataset, then, does support the contention that DVCS and Git are effectively mainstream options, but is insufficiently detailed to prove the hypothesis that Git has become a true juggernaut amongst current adoption – even if the anecdotal evidence concluded this a long time ago.

Categories: Version Control.

Changing Tack: Evolving Attitudes to Open Source

Santtu at the helm

Even five years ago, evidence that the role of software was changing was not difficult to find. Microsoft, long the standard bearer for perpetual license software sales, had seen its share price stall for better than a decade. Oracle was in the midst of a multi-year decline in its percentage of revenue derived from the sale of new licenses. Companies that made money with software rather than from it, meanwhile, such as Amazon, Facebook and Google were ascendent.

It wasn’t that software had become unimportant – quite the contrary. It was becoming more vital by the day, in fact. As Marc Andreessen pointed out later that year, across a wide number of traditional industries, the emerging players were more accurately considered technology companies – and more specifically, software companies – that happened to operate in a given vertical than the reverse.

This counterintuitive trend was what led to the publication of “The Software Paradox,” which attempted to explain why software could become more valuable and less saleable at the same time. And what companies within and outside the software industry should do about it.

One of the most important factors in both making software more difficult to sell and more vital to an organization was open source. In general, organizational attitudes towards open source tended to be informed by a variety of factors, but could be roughly categorized along generational lines. This classification was presented to the OSBC audience in 2011:

  • First Generation (IBM) “The money is in the hardware, not the software”:
    For the early hardware producers, software was less interesting than than hardware because the latter was harder to produce than the former and therefore was more highly valued, commercially.

  • Second Generation (MSFT) “Actually, the money is in the software”:
    Microsoft’s core innovation was recognizing where IBM and others failed to the commercial value of the operating system. For this single realization, the company realized and continues to realize hundreds of billions of dollars in revenue.

  • Third Generation (GOOG) “The money is not in the software, but it is differentiating”:
    Google’s origins date back to a competition with the early search engines of the web. By leveraging free, open source software and low cost commodity hardware, Google was able to scale more effectively than its competitors. This has led to Google’s complicated relationship with open source; while core to its success, Google also sees its software as competitively differentiating and thus worth protecting.

  • Fourth Generation (Facebook/Twitter) “Software is not even differentiating, the value is the data”:
    With Facebook and Twitter, we have come full circle to a world in which software is no longer differentiating. Consider that Facebook transitioned away from Cassandra – a piece of infrastructure it wrote and released as open source software – for its messaging application to HBase, a Hadoop-based open source database originally written by Powerset. For Facebook, Twitter, et al the value of software does not generally justify buying it or maintaining it strictly internally.

While it’s certainly possible to debate the minutiae of these classifications, the more interesting question is whether they would persist. Recently, we’ve begun to see the first signs that they will not. That second and third generation organizations that believed – at minimum – in software as a protectable asset have begun to evolve away from these beliefs.


Google’s release of TensorFlow was particularly interesting in this regard. Google’s history with open source software was and is complex. The company was built atop it, and as representatives like Chris DiBona are correct to note, in the form of projects such as Android Google has contributed millions of lines of code to various communities over time. But it tended to be protective of its infrastructure technologies. Rather than release its MapReduce implementation as open source software, for example, it published papers describing the technologies necessary to replicating it, out of which the initial incarnation of Hadoop was born.

With TensorFlow, however, Google declined to protect the asset. Rather than make the code replicable via the release of a paper detailing it, it released the code itself as open source software. As Matt Cutts put it:

In the past, Google has released papers like MapReduce, which described a system for massive parallel processing of data. MapReduce spawned entire cottage industries such as Hadoop as smart folks outside Google wrote code to recreate Google’s paper. But the results still suffered from a telephone-like effect as outside code ran into issues that may have already been resolved within Google. Now Google is releasing its own code. This offers a massive set of possibilities, without reinventing the wheel.

This move is relatively standard at fourth generation companies such as Facebook or Twitter, but it represents a change for Google. A recognition that the benefits to releasing the source code outweigh the costs. While the market’s understanding of and appreciation for the benefits may lag – the WSJ writeup of the news apparently required a quote to confirm that “It’s not a suicidal idea to release this” – Google’s does not.


For many years and across many teams at Microsoft, open source was a third rail issue. In spite of the rational, good work done by open source advocates within the company like Jason Matusow or Sam Ramji, the company’s leadership delivered a continual stream of rhetoric that alienated and antagonized open source communities. Unsurprisingly, this attitude filtered down to rank and file employees, many of whom viewed open source as an existential threat to their employer, and therefore was something be fought.

With years and a change in leadership, however, Microsoft’s attitude towards open source is perceptibly shifting. While the company has been moving in this direction for years, recent events suggest that the thawing towards open source has begun to accelerate. In November of last year, nine months after Satya Nadella took the reins at Microsoft, large portions of the company’s core .NET technology were released as open source. Last April, the awkward Microsoft Open Technologies construct was decommissioned and brought back into the fold. Seven months after that, Microsoft inked a partnership with open source standard bearer Red Hat, one that president of product and technology Paul Cormier “never would have thought we’d do.” And most recently, the company’s Visual Studio Code project – built on Google’s Chromium among other pieces of existing open source technology – was itself open sourced in a bid to make the editor truly cross-platform.

It can certainly be argued (and was by RedMonk internally) that many of these are simple and logical decisions that should have been made years ago. It’s also important to note that Microsoft’s twin mints, Office and Windows, remain proprietary in spite of public comments contemplating the alternative. All of that being said, however, it’s difficult to argue the point that on multiple levels, it is, as engineer Mark Russinovich says in the above linked piece, “a new Microsoft.”

The Net

What does it mean when an organization that saw software as an asset worth protecting commits to open source? Or one that viewed software as the ends rather than the means and had tens of billions of dollars worth of evidence supporting this conclusion? The short answer is that it means that open source is being viewed more rationally and dispassionately than we’ve seen since the first days of the SHARE user group.

Open source is being viewed, increasingly, as neither an existential threat nor an ideological movement but rather an approach whose benefits frequently outweigh its costs. There’s a long way to go before these concepts become truly ubiquitous, of course. Even if the most anti-open source software vendors are beginning to come around, the fact that the announcement of Capital One’s Hygieia project was considered so unusual and newsworthy suggests that enterprises are lagging the vendors that supply them in their appreciation for open source.

But if the above generational classifications begin to break down in favor of nuanced, strategic incorporation of open source, that will be a good thing for the market as a whole, and for the developers that make it run.

Disclosure: Neither Google nor Microsoft is a RedMonk customer at present.

Categories: Open Source.

Crossing the Amazon: IBM in an Age of Disruption

cloud formation over amazon river

The Wired headline in April of this year read, “Amazon Reveals Just How Huge the Cloud Is for Its Business.” The numbers for AWS were $4.6B for 2014, up 49% from the year before and on track to hit $6.23B by year’s end. The TechCrunch headline from October was “Amazon’s AWS Is Now A $7.3B Business As It Passes 1M Active Enterprise Customers.” Revenue at $7.3B, not $6.23B. A growth rate no longer of 49%, but 81%.

It is the velocity and trajectory of this business that has everyone in the industry spooked and valuations of the business formerly relegated to the “other” revenue category on financial statements accelerating. Even after seeing sales shrink for 14 consecutive quarters, after all, and amidst calls to rebrand the company from Big Blue to Medium Blue, each of IBM’s non-finance business units generated more revenue in 2014 than AWS projects to this year. Three out of the four were a multiple of the seven billion figure: GTS was ~$37B, Software $25B and GBS came in at ~$18B.

But the market and evaluators alike are less concerned, at least in the case of Amazon and IBM, with present day revenue figures than how they project to change over time, hence the euphoric AWS headlines and the quarterly pillorying IBM receives. What IBM is going through at present, in fact, suggests that Michael Dell’s original decision to take his firm private was a wise one.

Market disruption is a violent process, and surviving it can be almost as drawn out and painful as succumbing to it. As IBM knows, of course, having been one of the few companies to reinvent itself more than once. Expecting the same patience from investors, however, is a lot to ask, particularly in an age of activist shareholders carrying Damoclean swords.

If bullish perceptions of cloud native players, Amazon and otherwise, are driven by expectations of future returns driven by current models, however, it is perhaps worth taking a step back and evaluating IBM’s current models rather than current returns. The question is how should IBM, or companies in IBM’s position, respond to the macro-market factors currently disrupting its businesses.

From a high level, all of the incumbent systems players – from Cisco to Dell/EMC to HP to IBM to Oracle – need to recognize, among other market dynamics, the following:

  • Between the ascendance of ODMs and the explosion of IaaS, the market for premium low end hardware is gone. What hardware growth there is will come from the cloud – just ask Amazon, Google or Microsoft.
  • Traditional perpetual license software models are not gone, but in systemic decline. Customers instead are shifting to services-based models, with additional value adds from data (both collected and sourced).
  • Open source and commodity services have offered customers some relief from lock-in, but it remains as closely tied to profit as Shapiro and Varian described in 1999. This implies that while it’s important to offer commodity entrypoints, higher-end proprietary services will be critical to both profit and retention.
  • New market conditions require new partners.

Measured by this criteria, at least, IBM is making logical adjustments to its businesses.

  • Low-end hardware businesses have been divested, and investments redirected to potential growth businesses such as Softlayer.
  • An increasing emphasis within its software business is on services, e.g. Bluemix, acquisitions like Cloudant/Compose/etc, or the just announced Spark-as-a-Service.
  • Proprietary or exclusive offerings such as Watson or the Twitter and Weather Company partnerships offer IBM the ability to upsell customers to higher margin, more difficult to replicate externally services.
  • IBM’s partnership with Apple gives them a premium mobile hardware story, and Box CEO Aaron Levie was prominently on display at Insight.

From a directional standpoint, IBM appears to be responding to the systemic disruption across its footprint with a combination of internal innovation (Watson), open source (Cloud Foundry, Node, OpenStack) and inorganic acquisition (Bluebox, Cloudant, Softlayer, etc). Betting on cloud over traditional hardware, or SaaS rather than shrink-wrapped software may not seem aggressive to independent industry observers for whom the writing has been on the wall since halfway through the last decade, but the larger the business the more difficult it is to turn.

Much of IBM’s ability to reverse its recent downward financial trend, then, depends on its ability to execute in the emerging categories on which it has placed its bets. Some adjustments are clearly necessary. A heavy majority of the airtime at its Insight show this week, for example, has been devoted to its Watson product. While the artificial intelligence-like offering is intriguing and differentiated, however, as a business tool it’s a major marketing challenge. Positioning compute instances or databases offered as a service is a simple exercise. Explaining to audiences what “cognitive computing” means is non-trivial. Not least because unlike cloud, IBM is trying to push that rock up a hill by itself. Strangely, however, the company seems intent on leading with the most difficult to market product, rather than using more widely understood cloud or SaaS businesses as an on ramp and using Watson as a secondary differentiator. It would be as if AWS led with Machine Learning and mentioned, after the fact, that EC2 and RDS were available as well.

That being said, marketing and positioning is a solvable problem if the strategic direction is correct. And 14 quarters of declining revenue or no – remember that as AWS itself demonstrates, revenue is a lagging indicator – IBM is in fact making changes to its strategic direction. The company just makes it harder than it needs to be to see that at times.

Whether they can execute on these new directions, however, is what will determine whether the company’s turnaround is successful.

Disclosure: Amazon, Cisco, Dell, HP, IBM, and Oracle are RedMonk customers. Google and Microsoft are not current customers.

Categories: Cloud, Conferences & Shows.

All In: On Amazon, Dell and EMC

Datacenter Work

In her 1969 book, On Death and Dying, the Swiss psychiatrist Elisabeth Kübler-Ross attempted to capture and document the emotions most frequently experienced by terminally ill patients. The model is famous today, of course. Even if you don’t remember the model’s name, you’ll probably recall that individuals faced with a life-threatening or altering event are expected to experience a series of five emotions: denial, anger, bargaining, depression and acceptance. Though the model’s accuracy has been challenged and research doesn’t support it as either definitive or all-encompassing, its utility has sustained it through the present day.

While there are significant differences between corporate entities and human beings, Citizens United notwithstanding, there are interesting parallels between organizations faced with the threat of disruption and people faced with disruption’s human equivalent, death.

If you listen to incumbents talk about their would be disruptive competitors year after year, for example, specific, industry-wide patterns begin to emerge. Patterns which, as with the Kübler-Ross model, progress in stages. When you talk to a given incumbent about would-be disruptors, chances are good you’ll have a conversation like the following. The interesting thing is that you’ll have essentially the same conversation with any of the incumbents; their responses all follow this basic pattern. The timing of the conversational stages may vary, the substance almost never.

  • Stage 1: “I’ve never heard of that company.”
  • Stage 2: “Yes I’ve heard of them, but we’re not seeing them in any deals.”
  • Stage 3: “They’re beginning to show up in deals, but they’re getting killed.”
  • Stage 4: “They’re growing, but it’s all small deals and toy apps, they don’t get the enterprise.”
  • Stage 5: “Here’s how we compete against them in the enterprise.”

As with a patient facing a life-threatening diagnosis, the threat is difficult to acknowledge, let alone process. Acceptance, therefore, is arrived at but gradually.

Which brings us, oddly enough, to Amazon. Even shortly after S3 and EC2 debuted in March and August of 2006, respectively, it was evident that these services – their relatively primitive states notwithstanding – were strategically significant. The reaction of incumbents at the time? “I’ve never heard of Amazon Web Services.” Or if the company representative was especially progressive, “”Yes I’ve heard of Amazon Web Services, but we’re not seeing them in any deals.”

Five years ago last month, the only real surprise left was the lack of apparent concern about Amazon from the market incumbents it was busily disrupting. Here was a company that was quite obviously a clear and present danger, but much of the industry seemed stuck on the idea of Amazon as a mere retailer. Where companies should have been moving in earnest, what you’d hear most often was “Amazon Web Services is beginning to show up in deals, but they’re getting killed.”

In the years since, belated recognition of the threat posed has triggered massive responses. While claiming publicly that “Amazon Web Services is growing, but it’s all small deals and toy apps, they don’t get the enterprise,” behind the scenes massive investments in datacenter buildouts were underway, and organizations attempted to quickly retool to embrace and fight the cloud simultaneously.

None of those responses, however, are more massive than the announcement that Dell is acquiring EMC. Should the transaction close, at $67B it would be larger than the second largest technology acquisition – HP/Compaq – by a factor of two if you account for inflation, nearly three if you don’t. The obvious question is what this all has to do with Amazon.

On the surface, it might seem that the answer is very little. Dell went private in 2013 and so the numbers we have are old, but as of two years ago the revenue Dell derived from its traditional enterprise lines of business – servers, networking, storage and services – was $19.4B. The numbers for its traditional PC business – desktop PC and mobility – were $28.3B, or thirty percent higher. The problem for Dell, and one of the reasons it was making a big push amongst analysts at the time around its enterprise business, was the relative trajectories of the revenue streams. Even with modest to negative growth from its services (1%) and storage (-13%) businesses, servers and networking buoyed its enterprise business to 4% growth from the year prior. Mobility and PC returns over that same span were down 15%. All of which makes the decision to go private straightforward: it was going to get worse before it got better.

If Dell was going to bet on a business moving forward, then, it had essentially two obvious paths it could follow. Behind door number one was doubling down on the PC and mobile markets. The former market is being actively hollowed out, with both volume and margin cratering. In the latter, Apple effectively owns the entirety of the market’s profits.

Dell’s messaging and behavior, both before and after its decision to escape the limelight of the public market, suggested that Dell had picked door number two. Dating back at least to the 2009 $4B acquisition of Perot Systems, Dell has had ambitions of moving upmarket from the increasingly problematic fortunes and falling margins of the PC business. Every acquisition since then, in fact, is in service of the company’s enterprise ambitions.

In the context of 2008 and 2009, this directional shift was understandable. Amazon was growing fast, but unless you were paying close attention to the new kingmakers – the developers who were inhaling cloud services – its significance was not apparent. Certainly very few boards understood on a fundamental level the threat that cloud infrastructure and services would pose to their proven enterprise offerings.

The question facing Dell is whether the strategy that made sense in 2008 or 2009 makes sense today. As current EMC CEO Joe Tucci said in announcing the news, “The waves of change we now see in our industry are unprecedented and, to navigate this change, we must create a new company for a new era.” It is true as many observers have noted that this announcement is about more than AWS.

But it is also true that the new era Tucci referred to is increasingly defined by AWS. Witness the AWS announcements at re:Invent last week. It has been understood for a while that commodity servers and storage were vulnerable; if Dell going private wasn’t evidence enough, IBM’s deprecation of its x86 business and HP’s struggles with same should be. Many enterprise providers believed, however, that higher margin software areas were outside the scope of Amazon’s ambitions. This was a mistake. At re:Invent, AWS reconfirmed with offerings like QuickSight that there is very little outside the scope of their ambitions. Traditional enterprise providers must expect AWS to use its core services as a base of operations from which to target any and all adjacent enterprise software categories that promise sufficient margin.

When you couple the accelerating demand for and comfort level with infrastructure and software as a service with a widening enterprise-appropriate portfolios, it is indeed a new era, and one in which many traditional suppliers are playing catch up. To borrow Reed Hasting’s metaphor, Amazon is becoming the enterprise incumbents faster than they are becoming Amazon. Much faster.

The addition of EMC would obviously bring Dell a variety of assets that could be deployed towards a variety of ends. EMC plugs their most obvious infrastructure hole, and the company owns stakes in key software entities in Pivotal and VMware among others, the former of which is reportedly expected to go public and the latter of which is expected to be kept that way. The addition of EMC, however, better equips Dell to compete against the likes of Cisco, HP, IBM and Oracle than Amazon, however.

Which implies that the combined entity’s short term strategy will be competing against the traditional players for the enterprise dollar. Longer term, however, it will be interesting to see how it leverages its assets to compete in an increasingly cloudy world. Given the size of this deal, acquisitions that would move the needle from a cloud perspective can probably be ruled out. Which in turn means that any major push from the new Dell into the cloud – presuming there is one, eventually – will have to come from within or via the acquisition of much smaller players.

Given the meteoric rise of Amazon and widely assumed growth in demand for cloud services, it’s easy to criticize this acquisition, as many have, on the basis that it doesn’t make Dell an immediate alternative to the major public cloud suppliers. It is less obvious, however, whether another acquisition would. On paper, players like a CenturyLink (14.45B mkt cap) could be potentially be acquired for less than half the cost of EMC and bring with them a wide portfolio of infrastructure capabilities from bare metal through PaaS. In the real world, however, it’s difficult to imagine a company whose DNA dating back to the dorm room founding is manufacturing hardware for customers making a success of an acquisition that would be, for all practical purposes, a pivot into the cloud.

Instead, Dell went all in on building an organization that could more effectively compete with the traditional enterprise players. How they’ll all fare in the new era that Tucci referred to is the question.

Disclosure: Amazon, CenturyLink, Cisco, Dell, EMC, IBM and HP are all RedMonk customers. Google and Microsoft are not current customers.

Categories: Cloud, Hardware.

The 2015 Monktoberfest

As pre-conference headlines go, “astronomical tides,” “biblical rain” and “massive coastal flooding” would not be high on my list. Particularly if your conference is, like the Monktoberfest, on the coast. At a distance from it measurable in feet, in fact. The rains were so bad on the Wednesday before the Monktoberfest that it was for a brief period not clear that I would be able to make it back to Portland from Freeport where I was picking up the last of the conference supplies. According to the locals on our Monktoberfest Slack instance most of the major arteries into the city from Franklin Street to Forest Avenue had leveled up to actual rivers.

The Whole Foods in Portland, which is less than a mile from my office and the conference venue both, is on Franklin. It looked like this a bit before noon on Wednesday.

When that’s the scene a few hours before you’re supposed to host a chartered cruise to welcome your inbound attendees, things get interesting. Forecasts are consulted, phone calls are made, emails are answered and tweets are sent. The meteorologists assured us, however, that the worst was behind us and that the rain would blow through. Which, for once, is exactly what happened.

By five thirty, we were still looking at a lot of clouds but they’d quit actively dumping water on us. We were even treated to an actual sunset.

The moment the boat, biblical rains that day or no, nimbly pushed back from the dock everything was set in motion. The Monktoberfest at that point began its work, and arguably its most important function: connecting and re-connecting the people who take the time out of their schedule to be with us up here in Maine. On the boat, at dinner afterwards, and at Novare Res late that night, the kinds of conversations that people only have in person were had. Repeatedly.

At 10 AM the next day, we gathered at the Portland Public Library, as we have every year, to listen to talks, to contribute to talks with questions, and to meet each other. Over the next day and a half, we had talks on everything from building a volunteer legion and open APIs/platforms to medievalism in gaming and brewing beer with cylon.js and raspberry PIs. Being an impostor to the economics of the hop industry. Our speakers were, as always, prepared, unique and excellent. And before you ask, yes, all of the talks were filmed and will be available later.

The Monktoberfest is, as the saying goes, a labor of love. Like any other conference, it involves hundreds of hours of labor on the part of a great many people. But we love it. We hope the attendees do too, of course, and every year it is reactions like this that make it all worthwhile.

I say this every year because it’s true: it’s the people that make this event worth it. Every Monktoberfest the people who help put it on ask me about how the group we have assembled can possibly be so friendly. My answer is simple:

If I read that from someone else I’d dismiss it as hyperbole. I had a difficult time explaining that, for example, to Whit Richardson, a reporter for the Portland Press Herald, who stopped by to talk about the event with me.

But the simple fact is that it’s not hyperbole. That description is verbatim what I am told, year in and year out, by our caterers, by the people we have staffing the show, by Ryan and Leigh and by all of the people new to our event. Exactly how we end up with such a good group is a mystery to me, but I certainly appreciate it.

The Credit

I said this at the show, but it’s worth repeating: the majority of the credit for the Monktoberfest belongs elsewhere. My sincere thanks and appreciation to the following parties.

  • Our Sponsors: Without them, there is no Monktoberfest
    • HP Helion: We can’t make the investments in food, drink and venue that have come to characterize the Monktoberfest without a lot of help. We were very grateful that HP Helion stood up and made a major commitment to the conference. They’re one of the main reasons there was a Monktoberfest, and that we could deliver the kind of experience you’ve come to expect from us.
    • Red Hat: As the world’s largest pure play open source company, there are few who appreciate the power of the developer better than Red Hat. Their support as an Abbot Sponsor – the only sponsor to have been with us all five years, if I’m not mistaken – helps us make the show possible.
    • EMC{code}: The fact that we’re able to serve you everything from Damariscotta river oysters to lobster sliders is thanks to EMC{code}’s generous support.
    • Blue Box: We should first thank Poseidon that we were able to get out on the water at all, but once he cleared the weather for us Blue Box was the support we needed for our welcome cruise.
    • Apprenda: Hopefully your brilliant new Libby 16oz tulips made it home safely. When you get a chance, thank the good folks at Apprenda for them.
    • DEIS: Of all of our sponsors, none was quite so enthusiastic as the DEIS project. They sponsored coffee, breakfast, snacks and they bought you a round. Food, coffee and beer makes them one of the conference MVPs.
    • Cisco DevNet: Got some bottles while you were out and need to open them? Thank the team over at Cisco DevNet for your bar quality spinner.
    • Oracle Technology Network / Pivotal: Maybe you enjoyed the Allagash peach sour. Maybe it was the To Øl citra pale. Or the Lervig/Surly imperial black ale. Either way, these beers were brought you by the Oracle Technology Network and the team at Pivotal.
    • CircleCI: Our coffee, supplied to us by Arabica, got excellent reviews this year. Part of the reason it was there? CircleCI.
    • O’Reilly: Lastly, we’d like to thank the good folks from O’Reilly for being our media partner yet again and bringing you free books.
  • Our Speakers: Every year I have run the Monktoberfest I have been blown away by the quality of our speakers, a reflection of their abilities and the effort they put into crafting their talks. At some point you’d think I’d learn to expect it, but in the meantime I cannot thank them enough. Next to the people, the talks are the single most defining characteristic of the conference, and the quality of the people who are willing to travel to this show and speak for us is humbling.
  • Ryan and Leigh: Those of you who have been to the Monktoberfest previously have likely come to know Ryan and Leigh, but for everyone else they really are one of the best craft beer teams not just in this country, but the world. As I told them, we could not do this event without them; before I even start planning the Monktoberfest, in fact, I check to make sure they’re available. It is an honor to have them at the event, and we appreciate that they take time off from running the fantastic Of Love & Regret to be with us.
  • Lurie Palino: Lurie and her catering crew did an amazing job for us, and as she does every year, deliver on an amazing event yet again. With no small assist from her husband, who caught the lobsters, and her incredibly hard working crew at Seacoast Catering.
  • Kate: Besides having a full time (and then some) job, another part time job as our legal counsel, and – new for this year! – being pregnant, Kate did yeoman’s work once more in designing our glasses and fifth year giveaway, coordinating with our caterer, working with the venues and more and more.How she does it all is beyond me. As I like to say, the good ideas you enjoy every year come from here. I can never thank her enough.
  • Rachel: Knowing that Kate was going to be incapacitated to some degree by her pregnancy, we enlisted Rachel’s assistance to share some of the load. Little did we know that we were going to get one of the most organized and detail-oriented resources in existence. Every last detail was tracked, interaction by interaction, in GitHub, down to the number and timing of reminder phone calls made. We couldn’t have done this without Rachel.
  • The Staff: Juliane did her usual excellent job of working with sponsors ahead of the conference, and with James secured and managed our sponsors. She also had to handle all of the incoming traffic while we were all occupied with the conference. Marcia handled all of the back end logistics as she does so well. Celeste, Cameron, Kim and the rest of the team handled the chaos that is the event itself with ease. We’ve got an incredible team that worked exceptionally hard.
  • Our Brewers: The Alchemist was fantastic as always about making sure that our attendees got some of the sweet nectar that is Heady Topper, and Mike Guarracino of Allagash was a huge hit attending both our opening cruise and hosting us for a private tour on Friday afternoon after the conference ended. Oxbow Brewing, meanwhile, did a marvelous job hosting us for dinner. Thanks to all involved.

On a Sadder Note


The first year that we held the Monktoberfest – before there was such a thing as the Monktoberfest, in fact – Alex King offered to help. Some of you might know Alex from his early work as a committer on WordPress. Others from Tasks Pro. Or FeedLounge. Or the now ubiquitous Share This icon. Or Crowd Favorite. Anyway, you see where I’m going: Alex was a legitimately big deal professionally, yet still happy to help me get a small event off the ground. His team produced the t-shirt design that have been used every year of the show. His company Crowd Favorite was our first sponsor, and sponsored every year that Alex ran the company. And he attended and evangelized each and every show.

He was, in many respects, the conference’s biggest supporter.

In July, he called to tell me that for the first time he was not going to be able to make the conference – but used the opportunity to keep supporting us. On September 27th, three days before the conference he helped build began, Alex passed away after a long fight with cancer. I did my best to tell our attendees who he was and what he had accomplished, but to my discredit I could not hold it together long enough. The best I could do was call for a moment of silence.

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I’ll have more to say about Alex, but in the meantime it is my hope that everyone who wears their 2015 Monktoberfest shirts for years to come will see the crown on the sleeve and be reminded of Alex King – a man who helped ensure there was a Monktoberfest, and a man who was my friend.

Categories: Conferences & Shows.

What SaaS Companies Forget to Talk About

Milk Shelves at Whole Foods

In the beginning, the problem facing Software-as-a-Service offerings was that they weren’t software. At least not in the traditional, on-premise sense that customers were accustomed to. To compete, then, as is often the case, SaaS had to become that which it competed with. Which meant that, fundamentally different delivery model or no, SaaS companies grew to resemble the software companies they were competing with, and in some cases, replacing. Everything from sales models (multi-year contracts) to the people hired away from on-premise software vendors by SaaS alternatives reinforced this idea, which to varying extents persists in SaaS companies to this day.

None of this is surprising, or in most cases, problematic. It was, after all, an adaptation to a market, one driven in large part by customer expectations. It does mean that SaaS companies have curious blind spots, however. So conditioned have they been to think and sell like the on-premise products they compete with that they’ve almost forgotten that they’re not on-premise themselves. The most obvious example of this at work is one that we’ve been discussing with our SaaS clients more and more of late.

Consider the enterprise IT landscape today. At virtually every level of infrastructure, there exist multiple, credible freely available open source options to pick from. From the VM to the container to the operating system to the scheduler to the database, choice abounds. Many of these were solutions first and products second, which means that while there may be rough edges, they have in many cases been proven to work at a scale that an average customer will never experience. Time was you had to have “bakeoffs” between competing commercial products to see if they would handle your transaction volume. These days, unless you handle more traffic than the likes of Facebook, Google or Twitter, that’s probably not necessary.

This is a remarkable achievement for an industry that at one time was dominated by expensive, functionally limited products that might or not work for a given project but guaranteed a poor developer experience. It is an achievement that has not come without a cost, however, and that cost is choice.

As has been documented in this space multiple times, the increasing volume of high quality open source software is bringing with it unintended consequences, among them lengthier and more challenging evaluations. As much as organizations didn’t appreciate only being able to choose from a small handful of expensive application servers, that was an approachable, manageable choice. There was one model and two or three vendors.

Today, there are many models to choose from, and thus many choices to be made. Public or private infrastructure. If it’s private, what does the infrastructure consist of? OpenStack? Cloud Foundry? Kubernetes? Mesos? What is the appropriate atomic unit of computing? VM? Container? App?

For organizations that are both capable and view their technical infrastructure as a competitive edge, this is a golden age. Never before has so much high quality engineering – tech that would been unimaginably expensive even a decade ago – been available at no cost. And free to modify.

This does not, however, describe most organizations. By and large enterprises are doing well today to merely keep their heads above water with a well thought out and accepted public versus private infrastructure strategy, never mind all of the other choices that follow from there.

Which brings us back to the businesses offering SaaS solutions. When they brief us, they spend the majority of their time talking about their engineering, their usability, their sales, their partners, their pedigree and so on. They discuss not at all, in general, the biggest potential differentiator they have: the absence of choice.

This again is understandable: very few vendors want to go to market saying “no more choices for you.” But the time is coming, quickly, when this might be exactly the right message. If you have a hosted application platform, for example, do you really want to get bogged down in a feature comparison between an on-premise alternative? Or would you prefer to call attention to the fact that all of the evaluation that goes into determining which of the Container/OpenStack/Cloud Foundry/Kubernetes/Mesos cabal to use and how they can be fit together no longer needs to occur? That the idea of having an application idea in the morning and deploying it in the afternoon is actually realistic because the infrastructure has already been assembled?

There are counters to this argument, clearly. If I’m an on-premise provider, I’d be making a lot of noise about “noisy neighbors,” large scale outages (because enterprises rarely have the internal numbers to know how they compare) and so on. But I’d be making a lot of noise because deep down I’d understand that, paradoxically, SaaS’s removal of choice is advantage that looks more compelling by the day. Which is why I tell all of our SaaS clients to articulate not only what they offer, but the technology that clients no longer have to evaluate, test and deploy as a result of going with a service, because that is a fundamental value they offer.

They just forget that at times, which happens when you’re used to competing head to head with on-premise every day.

Categories: Software-as-a-Service.

Lighting Out for the Territories

One of the things that gets me through a spring of being on a plane five out of six weeks is looking forward to summer vacation. A vacation, importantly, that involves zero planes. One of the best parts of living in Maine is that I don’t need to fly to experience some truly spectacular scenery. After months of running around from airport to airport, meeting to meeting, call to call, I take full advantage of the slowest month in our business to take a step back, relax and recharge for the fall sprint.

This year’s iteration will feature a week in a cottage on the water up north, some camping and, if all goes well, a fair amount of time spent on the water. With the summer’s major construction project already completed, unlike last year‘s, it will hopefully (knock on wood) be a vacation spent injury-free. Instead, I’ll try to plow through a dozen or more books, brew a beer or two and swim under one of my favorite waterfalls.

Though I’ll be doing a bit of work on the Monktoberfest over the next few weeks – some jobs are never done – as of a few hours from now I will not be checking email or voicemail. If you have a legitimate emergency, contact Marcia (marcia @ who will know how to get in touch with me. Otherwise, I will see you all on the other side.

Enjoy your summers.

Categories: Personal.

At Long Last, Some Scheduling Help

Business Calendar & Schedule

Beginning in early March when I was lucky enough to get into the beta (which is still closed), I’ve been using’s automated personal assistant Amy to schedule meetings for me. The only real problem I’ve had using the technology has nothing to do with the technology. My issue, rather, is one of etiquette. The artificial intelligence behind Amy is good enough that with the exception of people who’ve heard of her, most people never realize they’re communicating with a bot. Which is a credit to the service, of course. But it leaves users with an important question: do I have to tell people on the other end that Amy’s not a person? Should I tell them?

Now you might be thinking that if the worst problem you have is with a new service is etiquette-related, that’s a good sign for the technology. And you’d be right.

As some have noticed, I have a long and unpleasant history with scheduling tools. As an analyst, a big part of my job is to talk to a lot of people, which in turn means that scheduling is a big part of my job. Which explains why I have tried, at one time or another, virtually every scheduling tool known to mankind. Some were people based – things like FancyHands. Others were services, some of which are still around, some of which have retired and one or two that have been forgotten entirely: Appointly, Bookd, Calendly, Doodle, Google Free/Busy, MyFreebusy, ScheduleOnce, Sunrise and on and on. None worked for me, though some were less bad than others. Which is why I still waste time – whether it’s mine or Juliane or Marcia’s – scheduling meetings.

The root problem with all of them, even MyFreeBusy or Tungle which generated the fewest complaints for our usage, was that it was one more moving piece in an already too complicated process. Request is made via email, check calendar, check third-party site, back to email, hope the slot is still open – rinse, lather, repeat. This was because the technical approach that most of the tools took was to implement an outboard, externalizable version of my calendar.’s Amy breaks with this tradition. Instead of reproducing my actual calendar minus the private meeting details plus some booking features, Amy replicates a person – a personal assistant, more specifically. Scheduling from my end is very simple: I email back that I’d be happy to schedule a meeting, CC Amy and shortly thereafter I get a meeting invitation in my inbox. She (or he, has a male counterpart) does the legwork on the back end via nothing more complicated than email and I end up with an appointment on my calendar.

In terms of process, it’s in truth not that different from my end than sending an email saying I’ll take a meeting and including a link to my Tungle calendar. But I never have to explain what Appointly/Bookd/Calendly/Doodle/MyFreebusy/ScheduleOnce/Sunrise/etc is. I never have to field feedback about how the UI is confusing. I never have to explain the difference between a given service’s version of my calendar and my actual calendar, that just because requested an open slot slot on the former does not mean it’s written and confirmed into the latter. And perhaps most importantly, anyone can find and make a schedule request on a public calendar – which means I can be spammed with non-relevant requests. The only requests Amy schedules are those I’ve explicitly asked for. Big difference.

Amy’s not perfect yet. It’d be nice if I could whitelist email domains from clients, for instance, so that they could schedule me via Amy without having to ask me first, and book me for 60 minute increments while non-clients are limited to 30. There is a learning curve as well; used to a settings page, it wasn’t obvious to me at first that setting defaults like my conference number, weekday availability and so on would be done just by emailing Amy. There is also no way currently to grant her access to my colleague’s calendars to make group scheduling of multiple analysts simpler, or group features in general.

But as I said back in 2005, however, the scheduling space has been crying out for innovation, and Amy delivers that in spades – even if I’m not quite sure what the etiquette is for her usage yet. Here’s hoping we see artificial intelligence like Amy employed in many more use cases down the line, because she’s already made my life better just by tackling my calendar – who knows what else she could fix.

In the meantime, we’ll be waiting for access to open up so I can get my analyst colleagues on board, because I can’t see any reason not to standardize RedMonk on Amy as soon as she or it is publicly available. It’s that good.

Categories: Collaboration.